Advantages Of Mitumba Business To Kenya

Kenya runs on the wheels of SME. The SME sector employs about 86 percent of the population and contributes about 45.5 percent to gross domestic product (GDP). The sector accounts for more than 90 of the businesses in Kenya.

Despite the numerous advantages of the SME sector in Kenya, according to the Kenya National Bureau of Statistics, 450,000 of them are closing shop annually, 30,000 monthly, and at least 1,000 daily. It is the most important sector yet the most ailing.

At the same time, Kenya’s unemployment rate has hit 43.5 percent according to an official from the National Employment Authority (NEA). The shocking statistics contradict all the other statistics that have been in the public domain for a long about the actual state of the unemployment rate in Kenya.

In 2017, the World Bank had estimated the unemployment rate in Kenya to be at 39.1 percent, the highest in the whole of the East African Region. Kenya’s unemployment rate is still ahead of Tanzania’s which stands at 24 percent while that of Ethiopia is at 21.9 percent. The unemployment rate in Uganda is at 18.1 percent.

The SME sector is made up of many sectors, among them, the Mitumba industry. The Mitumba industry alone, according to the Consortium of Mitumba Association of Kenya, employs about 2,000,000 Kenyans directly. So many others down the value chain.

In a country where the unemployment rate is higher than that of Tanzania and Uganda combined, a sector that employs at least 2,000,000 of its population should be cultivated to grow more so that it can create more job opportunities across the country.

Read More: 

• Kenya Imported 185,000 Tonnes Of Mitumba In 2019
• 91.5 Percent Of Kenyan Household Use Mitumba Clothes

In 2019, import taxes added up to US $15,000 per 40ft container (equivalent to 24 tonnes). Kenya imported 185,000 tonnes of second-hand clothing in 2019, equivalent to approximately 8,000 containers. The sector fetches revenue for the government in the tune of billions.

The taxes paid in 2019 amounted to 12 billion shillings. The secondhand clothing sector contributed at least 1 billion shillings in revenue per month. The traders also pay business license fees, among other payments to national and county governments.

The nominal value of imports of secondhand clothes into Kenya has risen by 80 percent from 10 billion shillings to 18 billion shillings in six years. It is a sector that the country cannot ignore under the pretense of protecting the local textile industry.

Read More:

• Is Mitumba Trade Killing The Local Textile Industry?
• Kenyan Textile Industry Vs the Mitumba Sector: Which Way?

Kenya cannot run away from the mitumba industry. With 91.5 percent of Kenyans buying secondhand clothes, it simply shows how important the sector is to the people and to the economy. The government needs to find ways to enhance the sector too.

The local textile industry should not fear competition. You cannot compete by eliminating competitors but by finding out why the competitors are better and improve on your services and products too.